Stock Market Terminologies “Investors” Should Know

With the global credit crunch, stock market meltdown and economic crisis, whatever you want to call it, I revisited the ghost from my past. The year was 1988. The Kuala Lumpur stock exchange was having a brilliant run. Everybody’s fishmonger, vegetable peddlar and pork seller had a stock market tip or two to share. And those who bothered to listen and bought some would have laughed all the way to the bank. Those were the times of “buy what make what.”

And then the market peaked. Stock prices tumbled. Those who still bothered to listen to the hawker dishing out char koay teow and stock market tips at the same time would have cried all the way to the bank. That was the time of “buy what die what.” The benchmark Kuala Lumpur Composite Index (KLCI) seemed to be freefalling into a bottomless abyss. Those were harrowing times for people who were still involved in the stock market.

I got burnt together with ten of thousand of other investors. To call ourselves investors is to put it nicely. We were actually greedy speculators who wanted to make money with little or no effort at all. If you are curious, yes, I am still holding on to some of the shares that I bought from those times. Ten years is a long time to be holding on to stocks that have depreciated 90% in value. I have learnt my lessons. I am now just a spectator despite the very attractive price of stocks such as Genting, Resorts and even IOI Corp. As for those shares that I still hold, they are now vestiges to remind me of a time when I was foolish and reckless with money and a stern warning not to repeat the same follies again.

It was during those trying times ten years ago that I compiled a list of stock market terminologies from various sources in the Internet. These classics are still relevant one decade later now.

STOCK: A magical piece of paper that is worth $33.75 until the moment you buy it. It will then be worth $8.50.

BOND: What you had with your spouse until you pawned his/her golf clubs to invest in

BROKER: The person you trust to help you make major financial decisions. Please note the first five letters of this word spell “Broke”.

BEAR: What your trade account and wallet will be when you take a flyer on that hot stock tip your secretary gave you.

BULL: What your broker uses to explain why your mutual funds tanked during the last quarter.

MARGIN: Where you scribble the latest quotes when you’re supposed to be listening to your manager’s presentation.

SHORT POSITION: A type of trade where, in theory, a person sells stocks he doesn’t actually own. Since this also only ever works in theory, a short position is what a person usually ends up being in (i.e. “The rent, sir? Hahaha, well, I’m a little short this month.”).

COMMISSION: The only reliable way to make money on the stock market, which is why your broker charges you one.

YAK: What you do into a pail when you discover your stocks have plunged and your broker is making a margin call.